Argentina’s annual inflation rate slowed slightly to just over 271 per cent, still one of the highest in the world.
The rate of inflation in Argentina was higher than the government of President Javier Milei had hoped for as the official statistics agency reported a slight rise in prices in June and an end to a months-long series of declines. Specifically, Argentina’s consumer price index rose 4.6 per cent in June, up slightly from 4.2 per cent in May, ending a five-month downward trend in inflation that experts attributed to a deepening recession caused.
Rising electricity and gas prices were also among a number of the main reasons for the inflationary spike in June. Argentines reported incredible utility bills after years of paying heavily subsidised rates under leftist governments, according to statistics.
The Argentine Energy Ministry reported in June that low-income families, who previously paid as little as 5% of the real cost of electricity, began paying a third of that amount, while middle-income families now cover at least half after the removal of subsidies by Milei. Plus, the country has capped electricity consumption to qualify for subsidies, leaving families at a disadvantage as a cold front hits Argentina in the Southern Hemisphere winter.
In addition, the report indicates the cost of living in the country has risen by almost 80 per cent in the first five months of 2024 compared to the same period last year. Prices in shops and restaurants in Buenos Aires have reached levels comparable to the United States, although the country offers only a fraction of wages.
The fall of the peso on Friday to another record low against the dollar was another blow. The value of one peso hit the 1,500 mark on the black market and capped another week of volatility after remaining stable in the first few months of the year.
President Milei has been praising the fall in prices in recent months as a victory against Argentina’s worst economic crisis in two decades. Since then, however, the price drop has brought little relief to ordinary Argentines as Milei continues to pursue a radical economic reform that includes cutting generous energy subsidies, removing price controls and devaluing the Argentine peso.
